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Mid-cap stocks and exchange traded funds can get overlooked, as they get pegged between large and small-cap headlines. A mid-cap focused ETF can play an important role in a portfolio, giving investors balanced exposure once an investor has looked into the holdings.

Yesterday we looked at small-cap funds, but today let's move up the capitalization spectrum.

SPDR S&P Mid-cap 500 (MDY) and the Vanguard Mid-Cap ETF (VO) have not been able to outperform large-caps for over a year now, but the performance of the funds is worthy of any portfolio. MDY has gained 9.6% year-to-date and VO has gained 8.9% to date.

"One of the most prominent differences in these two ETFs' holdings is the breakdown in the size of the constituent companies - both are billed as mid-cap plays, but VO has a greater slant towards larger-cap companies, with a weighted average market cap of $7.2 billion among its holdings, compared to a significantly lower $3.9 billion for MDY," S&P said in the note.

According to S&P Capital IQ, the reason for MDY's outperformance to VO can be attributed to MDY's exposure to the financial and healthcare sectors, which both give a dividend yield.

Furthermore, MDY has a better track record compared to VO over the past 5 years, possibly due to lighter exposure to the energy sector, reports Todd Rosenbluth, S&P Capital IQ analyst from a recent note.

VO focuses a large allocation to the consumer discretionary sector, a good, defensive play during times of market uncertainty. Plus, VO's expense ratio of 0.1% is tempting and hard to beat. MDY has an expense ratio of 0.25%.

The comparison draws attention to the importance of looking into an ETF, and the holdings. This way, an investor knows exactly what type of sector exposure they are gaining and can allocate their portfolios accordingly.

Tisha Guerrero contributed to this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Stuck In The Middle: Mid-Cap ETFs